A car dealership was entitled to a use tax credit against the Illinois sales tax it owed on retail sales of cars that it had made available under a loaner car program. A repair shop paid the dealership for the use of loaner cars by the repair shop’s customers.In Illinois, a lessor that incurs a sales tax liability on the sale of a formerly leased item can take a credit against that tax for use tax paid on the purchase of that item. The Illinois Department of Revenue has historically taken the position that cars used in circumstances similar to the loaner program are leased cars that qualify for the use tax credit. However, in this case, the department denied the use tax credit for the car dealership’s sales. The dealership showed that it was leasing cars in the loaner car program. The department argued that the dealership did not lease the cars because the dealership did not charge the repair shop’s customers for use of the cars, but it did not provide authority supporting its position. As a result, the dealership was entitled to the use tax credit. (Administrative Hearing Decision No. UT 14-03, Illinois Department of Revenue, August 25, 2014, released November 2014)